Mortgages

EP Wealth Management Mortgage Market Researching

• Mortgages
• First time buyer
• Moving home
• Remortgaging my home
• Buying a property to rent
• Credit problems
• Shared ownership home

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Most buy to let mortgages are not regulated by the Financial Conduct Authority

RIGHT TO BUY MORTGAGES
ADVERSE MORTGAGES
(CCJ’S, DEFAULT, CREDITING HISTORY/RATING, BANKRUPTCY, IVA)

First Time Buyer?

You may find buying your first home a little bit daunting. With the challenge of finding your first property, choosing the right mortgage, selecting the best solicitor and making sure the whole process runs smoothly, you may find the information below useful to help you achieve the first rung of the property ladder.

The first step is to contact us and we will advise you on the mortgage options available to you. It doesn’t matter if you haven’t found a property just yet, we can provide you with some facts and figures that will help you select the property within your price range.

In the meantime we’ve outlined below some background information on mortgages for first time buyers that we hope you’ll find useful.

How much can you borrow?

The amount of mortgage you can get depends on your income.  Some lenders use a multiple of your income others look at how much you can afford based on your income and outgoings. As a rough guide, a typical multiple is four times your income. This figure could be higher or lower depending upon your individual circumstances and different lenders’ criteria. Lenders who look at what you can afford base this on the number of people and any loans or debts that you have outstanding. Some lenders offer very good deals for first time buyers, so it always worth asking us to research the market on your behalf.

What other costs do you need to be aware of?

It is also worth remembering the additional costs, on top of your deposit and mortgage that you will be expected to pay.

For example, you will have to pay stamp duty, which is (from Jan 1st 2014) 1% of the purchase price for properties between £125,001 and £250,000, then 3% up to £500,000 and 4% on properties over £500,000 up to £1,000,000 5% over £1,000,000 up to £2,000,000 and 7% over £2,000,000. For properties up to £125,000 you do not have to pay stamp duty.

Plus you will have to pay for the survey and the valuation of the property, and solicitor’s fees.

You may also have fees to pay to the lender for your mortgage. These could be an arrangement fee and/or booking fee. Contact us to find out how much these fees may be.

Moving Home?

When you’re thinking of selling your existing property and moving to a new home, it’s important that you try and budget accurately. The more accurately you can estimate this figure, the better.

How Much You Can Spend On a New House?

To enable you to work out this, you first need to know what your total available funds are and then subtract the cost of moving home. Start by putting some simple figures down on paper, such as: Savings or assets you have available (not relating to your existing house) The maximum mortgage payment you can comfortably afford. Then you need to work out the cost of moving house:

What will selling your property cost?

(estate agents typically charge between 1%-1.5% of the property value)

What buying your new house will cost (mortgage fees charged by the lender, solicitors costs, removal lorries, etc) Once you’ve worked out the costs for each of the categories above, you can start looking at how much money you will have available from the sale of your existing property.  So,

What do you think your house will sell for?

What do you still owe on your current mortgage?

The first figure is easy enough to work, get at least three quotes from estate agents. Next, finding out what you still owe on your current mortgage is simply a matter of calling and asking your lender directly.

Traditional financial wisdom recommends your monthly mortgage payments are no more than a third of your monthly net income (i.e. what you take home after tax). We don’t want to sound patronising but we can’t stress enough how important it is not to overstretch yourself. Once you’ve had a mortgage and proved you can make repayments, lenders become minded to offer ever-increasing sums….Don’t expect lenders to lend responsibly. It’s up to you to make a judgment call as to the risk.

Remember, if interest rates start to increase, you need to ensure that you can still afford the monthly mortgage payments. An independent mortgage adviser will be able to provide you with different figures depending on rate rises. Potentially you could borrow anywhere between 3 – 5 times your salary (if you’re buying as a couple it’ll be more like 2.5 times your combined incomes). Each lender is different and with over 12,000 different mortgages it pays to get the right advice. The quickest way to discover the maximum you can comfortably borrow is by speaking to an experienced mortgage broker, such as ourselves, and getting them to check out all available mortgage deals, that way you can be sure you get the cheapest deal.

Re-mortgaging Your Property

Many of us are looking for a better mortgage deal, or would like to release some of the equity in our home but the process is often not as easy as it first appears. So what do you need to know before you seriously consider remortgaging?

Where to start?

The first step is to contact us and we can advise you on the best remortgaging options.

We will work with you to check the terms and conditions of your existing mortgage. These will tell if you are tied-in to your mortgage deal or if there are any early repayment charges. You can then decide if it is worth switching to a different rate or stay put until the penalties have expired.

How do I apply?

We will of course guide you through the whole remortgaging process, which will include:

• An early repayment statement will be needed from your existing lender telling you how much you owe.
• An application form from your new lender will need to be completed, along with details of your income and proof of your identity
• Your new lender values your home
• Subject to all the paperwork being satisfactory, the lender will issue a mortgage offer which will contain the amount of the mortgage and the terms that they will offer you
• Solicitors will need to be instructed at this point to arrange the legal documentation, leading through to completion of the loan

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How long does it take?

The whole process should take about a month to complete however this may vary from customer to customer. Once you have received a completion statement from your solicitor or new lender, the process has finished and your new mortgage is in place.

Buying A Property to Rent (Buy to Let)

This can be a popular mortgage option for those wishing to invest in residential rental property. Although the perception is that buy to let mortgages are expensive, this isn’t necessarily correct. There are many lenders who offer competitive rates, which in many cases are generally similar to the rates offered on a standard mortgage.

Landlords also have a choice between interest only and repayment mortgages. Buy to let mortgages do differ in several ways from standard mortgages. When lenders are considering approving a buy to let loan, they generally base their decision on the likely rental income from the property and not necessarily the applicants’ income. A prospective landlord needs to be aware that the rental income typically needed is 125% of the mortgage repayment, although this can vary from as little as 100% rental income up to 130%.

With our expertise in this market, we can help you find the best product to suit your requirements. With our extensive access to thousands of mortgages and our knowledge of lender’s requirements, we can find you the right buy-to-let mortgage.

Most buy-to-let mortgages are NOT regulated by the Financial Services Authority.

Do You Have Credit Problems?

Do you have County Court Judgements (CCJs), Defaults, Mortgage Arrears, Repossessions or have been bankrupt? Are you struggling to get finance due to your poor credit history? Despite your past or present financial circumstances, we can provide you with the help and advice that you need. We will fully assess your financial circumstances and run through the mortgage options available to you.

With our expertise and knowledge on credit problems, we can discuss your options and provide you with our non-biased advice that would best suit your circumstances. We can advise on mortgage options for all levels and types of adverse credit including CCJs, defaults, mortgage arrears, repossessions and bankruptcy.  So if you are struggling to get finance and finding that your past or present financial circumstances are making finding a home loan difficult, talk to us today.

Shared Ownership

What is shared ownership housing?

Shared-ownership is a great way into home ownership and is the main affordable housing scheme. If you can’t afford to buy outright, you can part buy/part rent your home. You might buy a 25%, 50% or 75% share in your home. You pay a rent on the share that you don’t buy normally set at an ‘affordable’ rate of, say, 2.75%. The bigger the share that you purchase, the less rent you have to pay. When you can afford to do so, you can buy more shares until you own your home outright in a process known as ‘staircasing’.

The other share in a shared ownership property is usually owned by a ‘housing association’. Alternatively, some shared ownership homes are provided by house builders directly on schemes called ‘shared equity’. The Homes and Communities Agency refers to such schemes as ‘Equity Loan’ schemes because the Government provides a loan to buy part of the home. First Buy is the latest Government equity loan scheme, following on from homebuy direct.

Who can buy shared ownership housing?

Shared ownership housing schemes are usually intended for people who cannot afford to buy a suitable home in any other way. However, the way in which this is defined will vary considerably with some shared ownership schemes merely being restricted to first time buyers and others to applicants living within a certain borough. Generally, priority goes to the following groups in the first instance, in order of priority: existing social tenants; serving military personnel; and then on equal priority ranking, local priorities as set by Local Authorities.

When a new housing scheme is developed that includes shared-ownership homes for sale, housing associations will usually advertise shared ownership properties for sale. If you are interested in shared ownership housing apply to the local authority or a housing association that offers shared ownership housing in your area as soon as possible.

Whatever your requirement we are here to help and provide unbiased advice that is best suited to your needs

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.

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We normally charge a fee for mortgage advice, however this will be dependent on your circumstances. Our typical fee is £200.

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